May 13, 2021

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The world economy will experience a shock of deflation: what does this mean for us?

1 min read
The world economy will experience a shock of deflation: what does this mean for us?

Finance is a complex science. The world economy does not always evolve in the way we would expect. As the US Fed prints an endless supply of money, many people are first to think of the risk of inflation. However, the opposite is true. Deflation becomes the real danger in such a case. Will Bitcoin take advantage of the opportunity?

 

Deflation: The world economy is slowing down

Bloomberg published an extensive article describing the ongoing deflation of goods in America. From food to gasoline. This looks good but the taste is very bitter. With cheap products, companies are unable to make a living and have to lay off. Thus, nobody has the money to buy and purchases less and at lower prices. Finance thus gets into an imaginary circle, which ends with the collapse of the economy.

However, the situation today is different in that the FED would not intervene against such a freeze. Normally, it cuts interest rates and forces people to invest. However, there is nowhere to reduce. Unless he went to negative figures, as the Germans had done before the crisis.

Bitcoin as a safe haven

This crisis, which the FED can hardly prevent, can affect everyone. It is quite possible that investors will rethink their attitude towards Bitcoin and start to pay more attention to the narrative that it is digital gold.

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